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« Gold Trading Vehicles: SK Options Outperform | Main | The Accumulator Trade 1 Update 03 March 2011: Position Closed »

First Majestic Silver Corp Up 25% since recommendation on the 9th Feb 2011

AG chart 03 March 2011.JPG

It was with some trepidation that we purchased First Majestic Silver Corp. (FR:TSX || AG:NYSE) on the 9th February 2011 as this silver producer had already increased its stock price in dramatic fashion. However, having interviewed Keith Neumeyer, President and CEO along with Todd Anthony, Investor Relations Manager Jill Arias, VP of Marketing we took the plunge and made the purchase for the an average cost of $13.13. First Majestic closed yesterday at $16.49 so we are off to a great start with a paper profit of 25%, achieved in just less then one month.

Taking a quick look at the chart we can see that AG has experienced a breakout to a new all time high on heavy turnover of 2.1 million shares. The RSI is just under the ‘70′ level, so still has a little room to move higher, along with the MACD which also has room to move higher. A note of caution here though as the gap between the stock price and the 200dma is widening which is something to keep an eye on.

Of course everything is dependant on silver prices but as you can see on the chart below they are doing very well indeed with the supply side growing ever tighter.

silver chart 02 march 2011.JPG

In a press release on Monday the company issued the following update:


Cash Flow per share (non-GAAP) of $0.62 per share representing a 676% increase from 2009

Earnings per share (basic) amounted to $0.39 representing a 410% over 2009

Total Cash Cost were US$7.94 per ounce, down 6% compared to 2009

Gross Revenue of $132.2 million showing an 85% increase from 2009

Net Revenue of $120.8 million showing a 103% increase from 2009

Mine Operating Earnings of $61.2 million showing an increase of 231% from 2009

Net Income after Taxes amounted to $36.1 million, a 472% increase from 2009

Silver only production increases by 72% to 6.53 million ounces compared to 3.8 million ounces silver in 2009

2011 guidance of 7.5 million ounces of silver or 8.0 million ounces of silver equivalent production

Fully un-hedged to silver prices.

We draw your attention to the fact that they are fully un-hedged and therefore offer total exposure to the price of silver.

At these price levels some will be tempted to forward sell their product and thus miss out on future price rises.

Looking ahead they expect production in 2011 to increase by 13% from 2010 levels as the 3,750 tpd La Encantada mill experiences a full year of commercial production and the expansion currently underway at La Parrilla is anticipated to begin to ramp up in the third quarter from 850 tpd to 1,600 tpd by year end.

First Majestic is a producing silver company focused on silver production in México and is aggressively pursuing its business plan of becoming a senior silver producer through the development of its existing mineral property assets and the pursuit through acquisition of additional mineral assets which contribute to the Company achieving its aggressive corporate growth objectives.

So far we are off to a flying start lets hope that team at First Majestic can keep it up.

PS: Just in case you missed it we have just closed an option play on with an average profit of 96.5% on Silver Wheaton Call Options. Click here to read more.

Many thanks to those of you who have recently signed up for options trading service, its very much appreciated. Please be patient as we have a number of new trades on the drawing board and as you are aware the timing of them is critical to their success.

We now have 65 winners out of 67 options trades, or a 97.00% success rate If you have any questions regarding these trades please address them through their site where they will be handled quickly and I hope efficiently.

sk chart 19 Feb 2011.JPG

The above progress chart is being updated constantly. However, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today, before we decide to cap membership.

Stay on your toes and have a good one.

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Reader Comments (1)

Up again today 5.95%, taking the paper profit to 31% in less than one month - Go AG GO!

March 4, 2011 | Unregistered CommenterSilver Prices

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